The private 5G market remains ripe with opportunities that most predict will eventually be unpeeled, but panelists during a recent Rethink Research webinar hinted that the technology itself is not to blame for this late-developing bloom.

Peter Cappiello, CEO for systems provider Future Technologies Venture, highlighted that growing opportunity during the “Private 5G Networks – Hype or Reality?” webinar, noting that his company had around $40 million in “open pipeline” a year ago, which “kind of represented that proof of concept, a single-site production profile.” That pipeline has since ballooned to $180 million, “and that’s not so much around new customer acquisition as it is the maturation of us getting moving beyond as an industry from single-site proof points to let’s scale to five sites, 15 sites, 20 sites, and then you start to see the lifetime value increase.”

That increased opportunity is being bolstered by the need for advanced automation capabilities that 5G standards are able to support. This is based on the 3GPP specifications baked into the technology by that standards body targeted at using licensed spectrum to support autonomous factories, which Tesla recently highlighted as part of its German Giga factory.

Another key to these autonomous factories is the low-latency focus 3GPP has embedded in the 5G standalone (SA) specifications. Vodafone recently noted that a 5G SA core can provide up to $10 billion per year in productivity savings for small- and mid-sized enterprises (SMEs) in the United Kingdom. This is based on the technology being able to support new low-latency services.

Mobile network operators (MNOs) have been jumping on these opportunities.

Verizon, for instance, recently struck a deal to provide a licensed-spectrum based private 5G network at a Cummins engine plant in New York. The network will cover the site’s 1 million square feet of industrial space and 1 million square feet of outdoor space that support 1,500 onsite employees that produce approximately 500 heavy-duty truck engines per day.

Shawn Hricko, plant manager at the Cummins facility, noted in a statement that the neutral host and private 5G platform “will allow us to implement Industry 4.0 strategies more quickly and more reliably.”

“The improved functionality will enable team members to communicate with one another more effectively, allow us to share more data across equipment and enable our ability to implement mobile industrial robots (MIRs),” Hricko added. “Collectively, these improvements will enable us to produce our engines more safely, more efficiently and with improved quality, which is a win for Cummins and our customers who rely on our products on a daily basis.”

Vijay Venkateswaran, CEO and strategic growth advisor at consulting firm Viventum, during the Rethink Research webinar also pointed to latency as being especially critical for worker safety in specialized environments. Venkateswaran explained this can in turn help power the business case for private networks using licensed spectrum.

“The workers [compensation] for a mining worker is 200% higher than that of an IT worker,” Vankateswaran said. “What we found was that if we could put in a private network and say the investment’s about a million dollars for a mine that's generating 20,000 metric tons of ore per year, I think the business case makes sense for itself in terms of just the reduction in employee comp and some of the risk reduction that you get improvement in, the autonomous ground vehicles that are operating in the mines and the overall productivity savings pays for itself. If you have a mine that's generating $80 million in annual revenue, the business case kind of solves for itself.”

While the 5G standard does open up new private network opportunities, Cappiello does not think all of what the 5G standards can support needs to be ported to the private 5G space. This includes the push toward an open 5G core, which Cappiello said is “gimmicky.”

“When we look at these large industrial customers, their current infrastructure is probably Cisco or Aruba, or some blend of vendors that we would expect to be a critical infrastructure environment,” Cappiello said. “There is not enough 3GPP knowledge at the enterprise level, in my mind, to start separating out network elements discretely. It's hard enough to make it work in a matched pair where you have a core vendor and a radio vendor.”

Instead, Cappiello thinks industrial customers would be better served with a more simplified technology package using a single-source of equipment or relying on an established operator using network slicing technology.

“When we start to bifurcate that and build out an open source core with a third-party radio, sure it can provide some flexibility to the operator in terms of being one to many in terms of core to radio but the value of that I think is degraded by the nuance of it,” Cappiello said. “At the end of the day, you need the core functionality to work, you need the radio functionality to work, and the intended purpose of the technology is to enable the business. I think when we start to do science experiments with open cores it takes away from the real value that we're trying to generate, which is helping them run their business safely and more efficiently through the technology. … I think it's unnecessary and we don't see it being adopted.”